Ayatollahs should learn lessons from history


Economic and social development will be the first casualty if the regime in Iran reverts to barbarism to counter opponents

FUTURE HISTORIANS will face the difficult challenge of deciphering the revolt now playing out on the streets of Teheran, Isfahan, Tabriz and other Iranian cities. Personal animosities apart, it remains far from clear what motivated those close to Ayatollah Khamenei to amateurishly announce implausible results for the Iranian presidential contest between four officially approved candidates.

We can, for the moment, discern two tangible realities.

The first is that Iran’s overwhelmingly young, urban and educated society has outgrown the Islamic Republic that worked so hard to create it. Quite how the ensuing revolt will resolve itself remains to be seen.

The second is that Mahmoud Ahmadinejad was so assured of the regime’s ability to intimidate Iranians that he happily flew off to attend the summit meeting of the Shanghai Co-operation Organisation (SCO) dismissing protesters as “dust”.

Media coverage focused more on his attendance than the event he was joining. The nature and the location of the SCO’s annual summit are indicators of how our planet is metamorphosing. They also carry salutary warnings for those who would cling to outmoded power in Teheran.

The SCO grew from a 1996 meeting between the governments of China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan in Shanghai. The organisation has grown over the years to now embrace Uzbekistan, India, Iran, Mongolia, Pakistan, Sri Lanka, Belarus and Afghanistan. Its initial focus was on defence and security across a great swathe of Asia in the wake of the Soviet Union’s collapse. Its attention has now shifted to today’s economic challenges. SCO members account for over a third of the world’s population and nearly 15 per cent of its GDP.

The SCO now includes the world’s largest holder of foreign currency reserves, China, and its third largest, Russia. Their decisions directly impact on the developed world’s governments given their need to finance large and often growing deficits. Beijing and Moscow are understandably nervous about the value of the reserves they overwhelmingly hold in US dollars. China alone holds some $767.9 billion of US treasury bonds. They both favour cautious global currency reform, while seeking to preserve the value of the dollar.

The SCO summit reiterated its support for “a stable, predictable and more diversified international monetary system”.

Presidents Dmitry Medvedev and Hu Jintao agreed to widen “the sphere of settlement in roubles and yuan” for Sino-Russian trade. As China has now replaced Germany as Russia’s main trading partner, such a move could have global implications.

China’s steadily growing demand for oil and other raw materials fits neatly with Russia’s wealth of natural resources, particularly in its sparsely populated east. The first Russian oil pipeline to China will go into service this year, further boosting economic interdependency between the two countries.

Harvard professor of history Niall Ferguson coined the term Chimerica to describe the Chinese-US partnership as one on which our future security and prosperity may depend. Although Chimerica is important, it is only one of a considerably more diffuse and complex web of overlapping vital partnerships in today’s world. Economic and political power usually go hand-in-hand, and the SCO is no exception. Prime minister Manmohan Singh of India and president Asif Ali Zardari of Pakistan held a rare bilateral summit, while Afghanistan’s president Hamid Karzai was also busy on the margins.

The changing multi-polar nature of global power was further demonstrated when Brazilian president Luiz Inácio Lula joined the SCO leaders for a summit of Bric nations, those of Brazil-Russia-India-China. The four leaders agreed their commitment to “reform of international financial institutions, so as to reflect changes in the world economy”. They also called for “emerging and developing economies” to have a “greater voice and representation in international financial institutions”.

These calls, it should be remembered, come from the only major growing economies on the planet. The rapidly changing nature of our planetary realities was further underlined by Brazil’s announcement on June 11th last of a $10 billion loan to the IMF, a total reversal of past patterns where the IMF made loans to Brazil. The location of the SCO-Bric summits also has much to tell us – and Ahmadinejad. These summits took place in Yekaterineburg, a central Russian city. Its international renown owes more to it being where the Russian royal family was massacred in 1918 than to its industry or transport connections. Bolsheviks panicked as western-backed royalist forces approached the city and shot the tsar, his wife, their five children and four staff in the basement of Ipatiev House where they were being held. Under glasnost and perestroika the Ipatiev House became a place of growing popular pilgrimage.

Local party boss Boris Yeltsin demolished the house in 1977 on orders from the Soviet politburo to prevent demonstrations marking the 60th anniversary of the Romanov massacre. Yeltsin would later write of being “ashamed of this piece of barbarism”.

The spectre of barbarism now hovers over Ahmadinejad’s Iran and clings to many of the authoritarian regimes that govern most of the members of the SCO. Economic and social development is impossible without the rule of law, including an independent and reasonably transparent judiciary. Investors and entrepreneurs will be few and far between if the local ayatollah or party secretary can decide what the law is to suit their own ends – and an independent judiciary is only possible within a democracy.

The success of Brazil and India demonstrate this while Moscow and Beijing awkwardly feel their ways forward. It is something the ageing veterans of Iran’s Islamic revolution may have yet to grasp. If they revert to barbarism, the task of future historians will be considerably easier.